Three joint operators agree to an arrangement in which they have an equal share in an agricultural joint operation. The work undertaken in setting up the joint operation cost £300 000 and each operator contributed in cash. Each operator will need to recognise the following accounting entry:
A) $\begin{array} { l c c c }
\text { DR } & \text { Cost of joint operation product } & £ 300,000 & \
\text { CR } & \text { Cash } & £ 300,000
\end{array}$
B) $\text { DR \quad Inventory in JO } \quad £ 100,000$
$\text { CR \quad Cash } \quad\quad\quad £ 100,000$
C) $\begin{array} { l r r r }
\text { DR } & \text { Cash in JO } & £ 300,000 & \
\text { CR } & \text { Cash } & & £ 300,000
\end{array}$
D) $\begin{array} { l r r r }
\text { DR } & \text { Cash in JO } & £ 100,000 & \
\text { CR } & \text { Cash } &£ 100,000
\end{array}$

Question

Three joint operators agree to an arrangement in which they have an equal share in an agricultural joint operation. The work undertaken in setting up the joint operation cost £300 000 and each operator contributed in cash. Each operator will need to recognise the following accounting entry:
A) $\begin{array} { l c c c } 
\text { DR } & \text { Cost of joint operation product } & £ 300,000 & \
\text { CR } & \text { Cash } &  £ 300,000
\end{array}$
B) $\text { DR \quad Inventory in JO } \quad £ 100,000$
$\text { CR \quad Cash } \quad\quad\quad £ 100,000$
C) $\begin{array} { l r r r } 
\text { DR } & \text { Cash in JO } & £ 300,000 & \
\text { CR } & \text { Cash } & & £ 300,000
\end{array}$
D) $\begin{array} { l r r r } 
\text { DR } & \text { Cash in JO } & £ 100,000 & \
\text { CR } & \text { Cash } &£ 100,000
\end{array}$

Quizplus · Accepted Answer

Each operator contributes equally to the joint operation, so each will record a debit to "Cash in JO" and a credit to "Cash" for their share of £100,000.

Three Joint Operators Agree to an Arrangement in Which They